Nearly one-third of U.S. military veterans get disability pay from the Department of Veterans Affairs, an all-time high.
In the past year alone, the volume of new veterans’ compensation claims has “exceeded even our most aggressive projections,” Joshua Jacobs, undersecretary for benefits at the VA, told lawmakers this week.
Why We Wrote This
Congress scrambled to pass an emergency spending bill to ensure veterans continue to receive benefits. Questions linger over why costs are rising so quickly and whether spending is best meeting the needs of veterans.
This surge in spending forced VA officials to go hat in hand to Congress this week, requesting $3 billion for a 2024 budget shortfall. They were granted the money in an emergency spending bill, now headed for President Joe Biden’s desk to be signed into law.
But lawmakers predicted this will not be the last time the department struggles with its ballooning budget. This has been driven by an aging veteran population, rising health care prices, and what are widely agreed to be much-needed improvements to VA facilities, including hospitals.
“Someone who’s put their life on the line for the country deserves tremendous support from our government,” says Mark Duggan, professor of economics at Stanford University. But perhaps there are ways to spend the funds, including job training and wage subsidies for working vets, that would prove beneficial, he adds.
The United States has been paying benefits to battle-injured soldiers since the Revolutionary War, but those figures have risen astronomically since the turn of the 21st century.
Today, nearly 30% of military veterans get disability pay from the Department of Veterans Affairs.
In the past year alone, the volume of new veterans’ compensation claims has “exceeded even our most aggressive projections,” Joshua Jacobs, Undersecretary for Benefits at the VA, told lawmakers this week.
Why We Wrote This
Congress scrambled to pass an emergency spending bill to ensure veterans continue to receive benefits. Questions linger over why costs are rising so quickly and whether spending is best meeting the needs of veterans.
This surge in spending forced VA officials to go hat in hand to Congress this week, requesting $3 billion for a 2024 budget shortfall and a projected $12 billion next year.
They were granted the money on Thursday to meet this year’s needs in an emergency spending bill, now headed for President Biden’s desk to be signed into law.
But lawmakers predicted this will not be the last time the department struggles with its ballooning budget, which currently stands at $370 billion.
The veteran population decreased, so why is spending on the rise?
Between 2000 and 2022, the share of veterans in the U.S. decreased by one-third. Yet the VA’s budget nearly tripled during that time. This has been driven by an aging veteran population, rising health care prices, and what are widely agreed to be much-needed improvements to VA facilities, including hospitals.
Democrats, for their part, have decried the growing privatization of some VA health services – known in VA parlance as “community care” – which is also driving up expenses. It’s a shift that began 10 years ago, after long wait times for veterans prompted a public outcry. Private care now accounts for about one-third of the VA’s $150 billion annual health care budget.
Another big driver of the latest soaring VA costs has been a law passed in 2022 called the Promise to Address Comprehensive Toxics, or PACT Act. It provides health care and other benefits for veterans exposed to toxic substances like the jet-fuel ignited pits used to burn plastic water bottles and medical waste, among other things, on U.S. bases during the wars in Iraq and Afghanistan.
Since the PACT Act went into effect, more than 710,000 veterans have enrolled in VA health care – a 34% increase, according to the agency.
The VA spent an average of $14,400 per veteran in 2022, versus $4,300 in 2005, adjusted for inflation, according to USAFacts, a nonprofit that analyzes government data.
How many more vets are getting benefits today than in the past?
Benefit claims are skyrocketing. Today, nearly one-third of America’s 18.5 million veterans – and 40% of post-9/11 vets – get disability pay, notes Mark Duggan, professor of economics at Stanford University.
By way of comparison, from 1954 to 2000, the share of former service members receiving disability payments was stable, generally somewhere between 8% and 10%.
During that same time period, average disability ratings – used to determine benefit dollars – hovered at around 10%.
Today, one-third of veterans have a disability rating of 50% or more, a “spectacular increase,” says Dr. Duggan, who has written about the topic with Lt. Col. Kyle Greenberg, associate economics professor at the U.S. Military Academy at West Point.
This is in part because the VA has expanded medical eligibility criteria to cover a larger category of service-connected injuries, which now include exposure to Agent Orange for Vietnam-era vets, for example, as well as potential secondary effects like diabetes and heart disease.
Disability payments range from some $171 a month tax-free for those with no dependents and a 10% disability rating to $3,738 for those with a 100% rating. They are adjusted up each year for inflation. Vets with families receive higher payments.
Once they’re granted, veterans can and often do apply to have these disability ratings increased – known as being “promoted.”
“The ratings basically never go down. If a condition improves, it’s not like people go back and say, ‘Oh, I’m doing better.’ It doesn’t happen, at least in the time period I looked at the data,” Dr. Duggan says. “It tends to go up.”
Is more money making life better for veterans?
Soaring VA expenses are prompting some analysts to ask whether the VA is using its funds in a way that best helps veterans.
These questions can be sensitive for public officials to tackle. “It’s very difficult to have a conversation about it, because it can very easily unintentionally signal that we sent troops off to do the dirty work and now we’re going back on our commitment as a nation,” says Katherine Kuzminski, director of the Military, Veterans, and Society Program at the Center for a New American Security think tank.
What’s more, up until recently, troops who served for less than 20 years weren’t entitled to retirement benefits, even though, as in the case of Iraq and Afghanistan, they were deploying frequently, she adds. This incentivized some vets to maximize compensation they could claim through other means.
Putting cost aside for a moment, the standard for success should be whether these programs are improving the lives of veterans, analyst say. Research shows, however, that even as benefits increase, veterans’ mental health, as measured by suicide rates, has decreased relative to their peers.
This in turn risks feeding a “broken veteran narrative” and corresponding concerns among young people, borne out in recent surveys, in which they cite physical injury and psychological distress as top reasons why they aren’t joining the military.
At the same time, while service-related wounds may certainly prevent some veterans from working, 20 years ago more veterans overall had jobs, which can support their well-being post-service, analysts say.
What to do about it? One possibility is to make disability benefits, which are currently provided for life, temporary, to be reevaluated periodically for conditions that are more likely to improve.
A recent Congressional Budget Office report also raises the possibility of reducing or eliminating disability compensation for higher-income vets, which the office estimates would save some $250 billion over 10 years.
Government benefits to veterans are provided in the highest spirit of gratitude and care. “Someone who’s put their life on the line for the country deserves tremendous support from our government,” Dr. Duggan says. But perhaps there are ways to spend the funds, including job training and wage subsidies for working vets, that would prove more beneficial, he adds. “I think it’s a fair question to ask.”
